… Part of the reason why live cattle prices are depressed is because packers are able to secure their needs by buying cattle with time…
Cattle Market Caught Saving the Day but Selling Out Tomorrow
By ShayLe Stewart, DTN/Progressive Farmer
Since the beginning of the new year, inflation has been something that we've all become more distinctly aware of, whether we've seen the spike in fuel prices, groceries or through other commodities -- it's affected us all to some degree or another. According to the USDA's Changes in the Consumer Food Price Index, compared to year-ago prices (comparing March 2020 to March 2021), all food has seen an increase of 1.6% year over year, food away from home has increased by 2.3%, and beef and veal prices have increased by 7.1%, while pork prices have increased by 5.3%.
Higher prices are being seen throughout the nation for various goods, but looking at the cattle market more specifically -- if corn prices are higher, if slaughter is chipping away at supplies aggressively and there isn't a backlog of market-ready cattle to work through, and if boxed beef prices are higher, then why aren't live cattle prices higher as well?
Addressing that problem specifically, today's cash cattle market is being cut short by two undeniable problems -- there's still a problem in our nation's food supply chain, and by allowing packers to buy cattle with time.
To be frank, and to call a "ball a ball and a strike a strike," beef consumers in the U.S. aren't getting enough of the product they desire. On Tuesday afternoon (April 27), both choice and select cuts closed more than $5.00 higher. Americans want beef and feedlots have cattle to sell, yet here we sit with live cattle prices still dancing around $120.00.
Part of the reason why live cattle prices are depressed is because packers are able to secure their needs by buying cattle with time.
There are two reasons why packers buy cattle with time:
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